Managing External Funding in Broadcast Television

Scope of this guidance note

This Guidance Note relates to the management of external funding accepted by the
ABC for internal content and for content co-produced with the independent
production sector for broadcast on ABC Television. This Guidance Note does not
apply to content broadcast on the ABC’s international television service. As a general
rule, the News Division does not accept any external funding or co-production
arrangements in relation to news coverage, but may consider such arrangements in
relation to current affairs or other factual content.

Key Editorial Standards

Excerpts of key editorial standards relevant to this Guidance Note are set out below.
Other editorial standards may also be relevant, depending on the specific
circumstances applying in each case.

13 External funding and relationships

13.1 Before the ABC enters into an arrangement for external funding or co-production of content, the arrangement must be scrutinised by an appropriately senior ABC person designated for the purpose who must reject the arrangement unless satisfied that the independence and integrity of the ABC are fully protected. Factors to consider include:

a whether the arrangement is permissible under the ABC Act;

b whether the content is something that the ABC would consider producing for broadcast or publication without external funding;

c the nature of the external partners’ interest in the subject matter of the content and in broadcast or publication of the content by the ABC, and how that interest – whether it be political, commercial, sectional, personal or otherwise – is likely to be perceived;

d the extent to which the making, promotion or scheduling of the content will be influenced by any funder and how that influence is likely to be perceived;

e the reputations of the external partners, including where relevant whether they have editorial standards similar to the ABC’s;

f the willingness of external partners to contract to comply with the Editorial Policies and to assist the ABC to comply;

g how the ABC will exercise an appropriate level of editorial control that is commensurate with the ABC’s contribution and consistent with its obligations under the ABC Act and Editorial Policies; and

h the degree to which the subject matter or proposed treatment of the subject matter or scheduling of the content is likely to be contentious, and ways to manage that contentiousness consistent with obligations under the ABC Act and Editorial Policies.

13.2 A record of the reasons for acceptance or rejection of external funding proposals must be kept.

13.3 The sources of funds obtained by external partners must be disclosed to the ABC before an external funding or co-production arrangement is formalised.

13.4 Do not accept public funding from Commonwealth, State or Territory governments or their authorities for the production and broadcast or publication of content which is or appears to be party political.

…

13.6 Any credits acknowledging creative, managerial and financial contributions must be editorially justified and not unduly prominent.

13.7 Ensure appropriate disclosure of any external funding arrangement, and any acceptance of free or discounted products, services or facilities, where the arrangement or acceptance, if it were not disclosed but later became public, may reasonably be perceived to distort the editorial content or otherwise undermine the ABC’s independence or integrity.

Mandatory referral

Under Editorial Standard 13.1, it is mandatory for an appropriately senior ABC
person to approve in advance any arrangement for external funding or co-production
of content. This process ensures that a high level of scrutiny is applied to all external
funding proposals. In the case of Television and News Divisions, the ‘appropriately
senior ABC person’ is respectively the Director Television and Director News.

Introduction

The ABC produces content itself with its own funds and can accept funding from
some government sources directly. The ABC also co-produces content with the
independent production sector and can accept some funding indirectly through
external partners. Co-production partners must be bona fide co-producers (see
Indirect funding: Co-productions below) who may also provide funding to the
program. Other regular funding sources for ABC co-productions include government
screen agencies, broadcasters, distributors and publishers.

In order to preserve ABC independence and integrity, there are limitations on what
funding sources can be accepted. A high level of scrutiny must be applied to funding
proposals to ensure that editorial control remains in the hands of the ABC, that the
non-commercial nature of the Corporation is maintained and that the ABC rejects any
funding source that may inappropriately influence, or be perceived to inappropriately influence, editorial content. The ABC must maintain editorial control over all its
content decisions.

Section 25 of the ABC Act generally prohibits the ABC from accepting money or
other benefits –

in return for broadcast of particular content; or

which may affect the ABC’s editorial independence and integrity.

Section 25 also empowers the ABC to engage in a broad range of activities in
performance of its functions, including –

acceptance of money or other benefits directly from certain government funding
sources; and

entering into arrangements with co-production partners for the sharing of
expenses and risks associated with producing content under which the coproduction
partner may accept money or other benefits from certain government
and private funding sources.

Before the ABC enters into an arrangement for external funding or co-production of
content, the arrangement must be scrutinised by an appropriately senior ABC person
designated for the purpose who must reject the arrangement unless satisfied that the
independence and integrity of the ABC are fully protected. Factors to consider are
set out in Editorial Standard 13.1 and include –

whether the arrangement is permissible under the ABC Act – see Types of
External Funding;

whether the content is something that the ABC would consider producing for
broadcast or publication without external funding – see Influence;

the nature of the external partners’ interest in the subject matter of the content
and in broadcast or publication of the content by the ABC, and how that interest –
whether it be political, commercial, sectional, personal or otherwise – is likely to
be perceived – see Nature of Interests;

the extent to which the making, promotion or scheduling of the content will be
influenced by any funder and how that influence is likely to be perceived – see
Influence;

the reputations of the external partners, including where relevant whether they
have editorial standards similar to the ABC’s – see Indirect funding: Coproductions;

the willingness of external partners to contract to comply with the Editorial
Policies and to assist the ABC to comply – see Compliance with ABC Editorial
Policies;

how the ABC will exercise an appropriate level of editorial control that is
commensurate with the ABC’s contribution and consistent with its obligations
under the ABC Act and Editorial Policies – see Compliance with ABC Editorial
Policies;

the degree to which the subject matter or proposed treatment of the subject
matter or scheduling of the content is likely to be contentious, and ways to
manage that contentiousness consistent with obligations under the ABC Act and
Editorial Policies – see Contentiousness of Subject Matter or Scheduling.

Editorial Standard 13 uses the term ‘external partners’ to include funders, producers,
publishers and distributors. This guidance note focuses on external funding and so
distinguishes between ‘producers’ who produce the content and ‘external funders’ who fund the content, although some external partners may do both. Sometimes the
term ‘external partner’ is used to cover both producers and external funders.

This Guidance Note covers –

Types of External Funding

Direct funding to the ABC

Indirect funding: Co-productions

Producer’s contribution

Indirect private funding sources

Indirect public funding sources

Nature of Interests

Influence

Decisions to make the content for broadcast by the ABC

Subject matter and how it is presented

Scheduling of the content for broadcast

Promotion of the content

Compliance with ABC Editorial Policies

Contentiousness of Subject Matter or Scheduling

Television Commissioning Process

News Commissioning Process

Disclosure

1. Types of External Funding

a. Direct funding to the ABC

Other than through its triennial funding allocation, the ABC can only seek and accept
direct funding from Commonwealth, State or Territory government departments and
authorities.

The status of an organisation as a government authority (which may include a
government agency) can be checked with Divisional Editorial Policy representatives,
who will refer to ABC Legal for advice where appropriate. Some entities that are
funded or part-funded by government will not qualify because they do not meet the
legal definition of a department or authority.

The ABC can only directly receive funding from the government sources above. Such
sources are subject to similar levels of public accountability as the ABC and they
often share a similar public purpose, for example screen funding agencies. There are
some exceptions, such as tourism agencies, where a government agency also has
commercial interests.

Government sources of funding can seek additional funding from a third party in
order to supplement their contribution to an ABC production. For example, a museum
that is a government statutory agency may raise additional funds from a related
foundation or trust.

Given the restrictions of the ABC Act, the following sources cannot be accessed
directly by the ABC –

public or private companies;

non-profit or not-for-profit organisations such as foundations, trusts or charities;

artistic organisations such as film festivals and regional arts councils; or

local government.

In the Television Division, all government funding and third party funding raised by
government sources, must be reviewed and approved using the Public Funding
Checklist. (See Television Commissioning Process below.)

In the News Division, all government funding and third party funding raised by
government sources is reviewed by the Head of Policy and approved or rejected by
the Director of News. (See News Commissioning Process below.)

b. Indirect funding: Co-productions

In order to undertake a co-production, the ABC must enter into arrangements with –

a bona fide producer of broadcasting programs to co-produce a program;

a bona fide producer of cinematograph films or sound recordings to co-produce

a film or sound recording; or

a bona fide producer of public concerts or other public entertainment to coproduce a concert.

For the purposes of this Guidance Note, to determine whether a person or entity is a
bona fide producer, consider whether –

the producer or production entity, either themselves or through their key creative
personnel, has a track record in the production of content of the type being
produced;

the producer or production entity has as their core business the production of
content of the type being produced;

the production of content of the type being produced is closely aligned to the
core business of the producer or production entity, for example an entity which
distributes content may diversify into production of content;

this would extend to new production entities which are set up by a bona fide
producer in the ordinary course of business, such as a special purpose vehicle
for a particular production.

If in doubt, seek advice from Divisional Editorial Policy representatives.

A bona fide producer can gather funding from a range of sources such as private
funding, public funding and their own financial contribution. Producers can source
funding from non-government sources because section 25 of the ABC Act allows the
ABC to engage with the independent television sector to foster creativity more widely
and to share the costs of creative production. Section 25(5) acknowledges the
composition of the industry, while 25(3) and 25(4) ensure an appropriate level of
scrutiny.

c. Producer’s contribution

A bona fide producer may contribute to the funding of their program through a range
of mechanisms, including equity, deferrals or cash flow of the producer offset.[1]

Sources of external funding must be disclosed to the ABC (Editorial Standard 13.3)
and funding proposals scrutinised (Editorial Standard 13.1) to ensure that the
independence and integrity of the ABC are fully protected.

It is necessary to avoid the use of a co-production to serve some other interest of the
producer such as a political, sectional, commercial or personal interest – see Nature
of Interests below.

d. Indirect private funding sources

non-profit or not-for-profit organisations such as foundations, trusts or charities;

artistic organisations (film festivals or arts councils); and

financial institutions, for example providing cash-flow for the producer offset.

Another source of indirect private funding is philanthropic funding. Such funding may
be channelled through bodies such as the Documentary Australia Foundation or
Creative Partnerships Australia, or raised through a crowd funding campaign using a
website such as Kickstarter or Pozible. There are specific challenges associated with
disclosure and scrutiny of funding raised in these ways. It is necessary to apply a
case-by-case assessment, having regard to factors such as the contentiousness of
the subject matter, the percentage of the production’s budget made up of
philanthropic funds, and either the scrutiny processes the philanthropic funding body
itself applies to donors or the manner in which the crowd funding campaign was run.
The Television Division has published detailed guidance on these funding sources in
two advice notes: Philanthropic Funding Bodies and Crowd Sourced Funding.

e. Indirect public funding sources

Indirect public funding sources include –

government screen funding agencies & other government authorities;[2]
and

Commonwealth, State or Territory government departments, authorities or
agencies.

ABC Television recognises that funds raised by producers from government screen
funding agencies or recognised industry sources of funding such as broadcasters,
sales agents or distributors are generally acceptable as their interests broadly align
with the ABC’s interests in producing and broadcasting high quality Australian
content. There may be exceptional cases where such funding sources may have an
interest in the subject matter of the content which will require scrutiny, for example in
the case of funding a documentary about the Australian screen industry.

To promote editorial independence and integrity, the ABC must consider whether or
not the external funding proposal would meet the ABC Act (including the ABC
Charter) and the ABC’s strategic objectives whether or not the funding was attached.
If not, the proposal should be rejected.

2. Nature of Interests

In order to maintain ABC independence and integrity, the ABC must scrutinise the
nature of the interests that potential funding sources – both public and private – have
in the subject matter of the content as well as in the broadcast of that content. Such
interests may be commercial, political, sectional, personal or otherwise. These
interests may run counter to the ABC Act, may appear to distort subject matter or
may give rise to a perception of inappropriate influence.

For the purposes of this Guidance Note, the interests referred to in Editorial Standard
13.1(c) can be described as follows –

Political interest – an interest that relates to the exercise of electoral choices or
government power.

Sectional interest – an interest that usually binds individuals together through a
shared belief, pastime, economic stake, concern, geographic location, cause or
other common factor. A sectional interest may be a partisan interest of a group
of individuals or organisations in advocating for change over a given social,
environmental, legal, industrial relations, religious or community issue.

Personal interest – an interest that is usually individual and close. This may
include a personal viewpoint, commitment, benefit, obligation or opportunity. It
may relate to an individual’s reputation or advancement. It may relate not just to
the individual personally but to their spouse, child, relative, or close personal
friend.

Commercial interest – an interest that usually relates back to monetary gain.
This can include financial gain, asset valuation, financial opportunity or
advancement.

The fact that a bona fide producer will benefit commercially from the co-produced
content, for example through on-sales, licensing or other commercial exploitation of
rights in the content, is an acceptable commercial interest. It is a producer’s separate
commercial or other interests which must be scrutinised and may mean that funding
is rejected. For example, a producer of a wildlife documentary may also own private
wildlife parks. The producer would have a commercial interest in wildlife parks which
would have to be considered separately to their commercial interests as a content
producer.

3. Influence

Having identified the interests of an external funder in any given proposal, it is
necessary to determine how that interest might be perceived. The independence and
integrity of the ABC may be undermined if the external funder influences, or can be
perceived as influencing, the making, promotion or scheduling of ABC content. This may be the case even if the external funder does not receive any actual advantage
from the ABC’s broadcast of the content.

The ways in which a commercial, political, sectional or personal interest could
influence, or be perceived as influencing ABC content will depend on the
circumstances of each proposal. There are four main ways in which influence or
perceptions of influence by such interests may arise –

by influencing the decision to make the content for broadcast by the ABC;

by influencing the subject matter of the content and how it is presented;

by influencing the timing of the scheduling of the content for broadcast;

by influencing the promotion of the content.

All four ways need to be considered in the circumstances of each particular external
funding proposal.

a. Decisions to make the content for broadcast by the ABC

Content that is broadcast on the ABC can tend to promote an external funder’s
interests and can benefit the external funder through association with the ABC brand.
Decisions to produce or commission particular content needs to reflect the editorial
judgement of the ABC and to answer any possible concern of partiality in that choice
as a result of the availability of external funding. In particular, Editorial Standard
13.1(b) asks whether the content is something that the ABC would consider
producing for broadcast without external funding.

b. Subject matter and how it is presented

The potential for an external funder to influence, or be perceived as influencing,
content will depend on the nature of the interest and the nature of the subject matter.
Factual content involving funding sources that have a commercial interest in the
content (commercial investors) requires particular caution, and normally will not be
acceptable.

As noted in an earlier report about external funding, “the very presence of a
commercial investor in an ‘infotainment’ program gives rise to an irreconcilable
conflict between preserving the absolute independence and integrity of the ABC from
even the suggestion of commercial influence on the one hand and, on the other
hand, recognising and giving at least some satisfaction to the valid expectations that
a commercial investor has in investing in such a program”. This suggests that even if
the program avoids content that is overtly promotional of the investor’s commercial
interest, and the funding source has no actual influence on the content, still the
perception may arise that it does, to the detriment of the ABC’s independence and
integrity. Those considerations obviously apply to factual content generally, and
remain pertinent in the scrutiny of funding sources today.

For example, if a co-produced documentary about a health condition were to contain
information about the benefits of treatment with a named drug, and the co-production
were to be partly funded by the manufacturer of the drug, then it is clear that the
content itself may be influenced by the commercial interests of a funder. Even if the
documentary did not extol the benefits of treatment with that drug, there could still be
a perception that the drug manufacturer was influencing (if not dictating) content by
way of inevitable pressure on the editorial managers both within the co-producer and
within the ABC. Such a proposal would be rejected so as to protect the
independence and integrity of the ABC.

Because the subject matter, genres and styles of content envisaged in external
funding proposals can vary so much, it is difficult to give generic guidance about how
the content may be influenced, or perceived as influenced, by an external funder. It
will be relevant to look at the degree of editorial determination of the content. For
example, the potential for influence will be less where the content is scripted fiction or
the content is predetermined (such as a concert performance). It will also be relevant
to look at how closely the external funder’s interests relate to the subject matter and
how likely it is that those interests will be advanced or even canvassed by the
program. These matters need to be considered case by case.

c. Scheduling of the content for broadcast

While the timing of a broadcast is determined by the ABC, the ABC’s scheduling of
content may coincide with some other interest of an external funder. For example the
ABC may commission production of a program featuring a particular comedian or
band and the broadcast may coincide with a stand-up tour or release of a
commercial CD. If the external funder has an interest in that stand up show or CD, a
perception of influence may arise. The fact of a coincidence of timing is not an
automatic reason to reject a proposal because there will be times when the audience
is best served by content being available when it is most topical.

d. Promotion of the content

For ABC productions, the type, platform and timing of the promotion of content is
determined by the ABC. The ABC is prohibited from accepting any obligation to
broadcast any promotion. The ABC may agree to undertake other promotion
provided it does not interfere with ABC independence or integrity. For coproductions,
the producer may promote, or permit external funders to promote, the
content on third party platforms on terms approved by the ABC but such promotion,
including advertising, publicity and marketing, must not misrepresent the nature of
the funder’s role in the financing, the production or the subject matter of the content,
or the ABC’s relationship to the funder.

In all cases, editorial managers need to be clear about the subject matter and
editorial purpose of the content as they review an external funding proposal. It is
necessary to exercise independent judgement and to manage risks of adverse
perceptions by being able to explain clearly the basis for the judgements that were
made.

Having identified the interests of an external funder and considered how those
interests might influence or be perceived as influencing ABC content, it is relevant to
consider the degree of influence. This may include –

the amount of funding offered;

the percentage of the total budget that the funder’s contribution represents;

what role, if any, the funder may play in the content or editorial decision making
about the content;

the funder’s promotional activities.

Where a funder has an interest, the timing of the attachment of the funder to the
proposal might be relevant. For example, if a detailed proposal was in place prior to
the attachment of the funder this might indicate that the proposal, up to that stage,
had not been influenced by that funder’s involvement. In observational documentaries and in current affairs programming, this might be more difficult to
ascertain.

The simple fact that an interest has been identified or that it has a potential for
influence is not a reason to automatically reject the external funding. All interests
need to be considered in the context of the proposed content and the circumstances
in which content is made, promoted and scheduled. The key issue for decisionmakers
assessing funding proposals is whether the identified influence is such as to
undermine ABC independence and integrity.

4. Compliance with ABC Editorial Policies

Editorial managers need to ensure that external partners understand the
requirements of the ABC Act and ABC Editorial Policies and that external partners
contractually agree to comply with the ABC’s standards. Willingness by external
partners to contract to help the ABC to fulfil its own obligations is one of the criteria to
consider when deciding whether to accept a proposal (Editorial Standard 13.1(f)).

The ABC must retain an appropriate level of editorial control over content (Editorial
Standard 13.1(g)). Where an external funder has the right to review, approve or
consult on certain elements this must not interfere with the ABC’s independence and
integrity in exercising its editorial control. Where appropriate, the ABC should seek its
own version of the program.

5. Contentiousness of Subject Matter or Scheduling

A higher degree of scrutiny is required over the funding sources and perceptions of
influence for contentious programming because it is more likely to affect public
perceptions of the ABC’s independence. The ABC should not shy away from
contentious topics as to tackle them is one of its Charter tasks. The Principles in
Section 13 of the Editorial Policies state –

Contentiousness alone is not a reason to reject a proposal. The ABC Act
requires innovative services of a high standard. The Editorial Policies require
the ABC to present a diversity of perspectives over time on contentious
matters. Innovation, high quality, diversity and contentiousness can travel
together, so long as risks are properly managed.

When external funding sources are involved with content that is inherently
contentious or becomes contentious because of changing circumstances, extra care
should be taken. The content may attract heightened attention and there will be
scrutiny as to whether the funding sources had an impact on ABC independence.
The scheduling of programs that have contentious subject matter and external
funding sources needs to be carefully considered in the circumstances.

Perceptions of influence by the funding sources can arise from the cumulative effect
of several factors. For instance, a funder may have an interest in the subject matter
which in isolation is not a sufficient reason to reject a proposal. The funder may have
an influence on the content which in itself is not inappropriate. But at the time of
broadcast the prevailing circumstances may produce controversy about the content
or the funder, bringing intense scrutiny and leading to all the separate factors being
judged cumulatively.

Due to the long timelines inherent in the processes of planning, producing, promoting
and presenting content, the circumstances at time of broadcast can differ greatly
from the circumstances at the time the funding proposal was approved. Editorial
Standard 13.1(h) draws attention to the need to manage such contingencies
consistent with obligations under the ABC Act and Editorial Policies. If prevailing
circumstances at the time content is scheduled for broadcast make an externally
funded program much more contentious than could have been envisaged when its
funding was approved, the heightened risk to independence and integrity may be
managed, for example, by broadcasting other content around it, such as a studiobased
discussion. Or, consistent with Editorial Standard 13.7, appropriate detail
could be provided about the background to the arrangements and the scrutiny which
was brought to the proposal prior to its approval.

6. Television Commissioning Process

The Television Commissioning process provides a decision-making, review and
reporting framework that supports the development and commissioning of content
and ensures adherence to the ABC Act (including the ABC Charter), Editorial
Policies and the strategic direction of all ABC Television platforms and channels.

The editorial component of commissioning a project includes scrutiny of all external
funding sources, review by Editorial Managers, endorsement by Television Editorial
Policy, and approval by the Director Television.

Editorial Policy Advisors and Editorial Managers use the Television Editorial Policy
checklists as a mechanism by which external funding proposals are detailed,
interrogated and submitted for approval. These checklists include a series of
questions derived from Editorial Policies and this Guidance Note to ensure that an
appropriate level of scrutiny has occurred, the ABC’s editorial independence and
integrity are protected in accepting the funding, there is no editorial influence from an
external funder, and any perceptions of influence are appropriately managed. The
checklists also provide surety that a record of the acceptance or rejection of external
funding proposals has occurred, which is a requirement of the Editorial Policies
(Editorial Standard 13.2).

While Editorial Policy Advisors have a formal role in this process by endorsing the
proposal via the Television commissioning database (Gecko) or on the checklist
itself, acceptance of all forms of external funding is the editorial responsibility of the
relevant Editorial Manager and Content Head. The Commissioning body, which
includes representation from Legal and Business Affairs, Finance and Audit, provides
endorsement of the proposals with final approval provided by the Director Television.

External funding is a complex area of editorial policy, and Editorial Managers and
Content Heads are encouraged to read this Guidance Note and seek early advice
from Editorial Policy Advisors in the Television Division.

7. News Commissioning Process

The News Division has developed its own internal checklists as a mechanism by
which external funding and co-productions receive appropriate scrutiny in
accordance with Editorial Policies. These checklists also ensure that acceptance or
rejection of each proposal is recorded along with the reasons for that acceptance or rejection.

8. Disclosure

Disclosure of external funders can help to address perception issues. Unless there
are exceptional circumstances, external funding contributions should be disclosed in
the form of a credit that is editorially justified and not unduly prominent or promotional
(refer to the Credits Guidance Note).

[1] The Producer Offset is a refundable tax offset (rebate) for producers of Australian feature films, television and other projects. It is administered through Screen Australia.[2] For example, Screen Australia, Screen NSW, Film Victoria, South Australian Film Corporation, Screen Tasmania, Screen West, Screen Queensland, ScreenACT, Northern Territory Film Office.

Status of Guidance Note

This Guidance Note, authorised by the Managing Director, is provided to assist
interpretation of the Editorial Policies to which the Guidance Notes relates. The
Editorial Policies contain the standards enforceable under the ABC’s internal
management processes and under the ABC’s complaints-handling procedures.

It is expected that the advice contained in Guidance Notes will normally be followed.
In a given situation there may be good reasons to depart from the advice. This is
permissible so long as the standards of the Editorial Policies are met. In such
situations, the matter should ordinarily be referred upwards. Any mandatory referrals
specified in Guidance Notes must be complied with.